Not a member? Register | Lost your password?

Weekly Focus - 18 May 2020

Weekly Focus                      18 May 2020

US technology companies show continued resilience
 

 

Investors were looking for new drivers to determine the direction of markets last week. As the relatively positive news flows from earnings season and the easing of lockdown measures subsided, bearish sentiment returned and major indices ended the week in the red. The possibility of an additional fiscal package of USD 3 trillion proposed by Democrats in the US suffered a setback as President Trump said this was ‘dead on arrival’.

 

However, in a speech on Wednesday US FED Chair Powell did not exclude further monetary stimulus after declaring there is significant downside risks to economic growth in the months ahead. Furthermore the US China trade talks which has come under scrutiny in recent weeks was a talking point again; President Trump declared on Fox Business news on Thursday that he had no interest in resuming talks with his Chinese counterpart and that the US might review its entire relationship with China!

 

There is less financial market stress now compared to a couple of months ago. The USD Libor – OIS spreads is lower after aggressive FED intervention and equity risk premiums have recovered sharply the FED announced open ended quantitative easing on 23rd March. Compared to European indices, the US market has performed better due to the outperformance of technology companies (chart above). The Euro Stoxx bank index was at all-time lows last week and a rebound is reliant on support which the European recovery fund will provide to the south which is exposed to tourism and the north which suffers from a slowdown in global trade.

 

Factset reports that analyst estimate the S&P500 index will rise to 3,220 in the next 12 months. This would represent a gain of 13% over its closing price of last week. Even if volatility remains elevated and range bound action is likely in the near term, a good asset allocation could reward investors in the long run.

 

 

Value

1 Week

YTD

Equity Indices

 

 

 

S&P500

2,864

-2.26%

-11.36%

FTSE JSE All Share

49,629

-2.70%

-13.06%

Stoxx50

2,771

-4.73%

-26.02%

FTSE100

5,800

-2.29%

-23.10%

DAX

10,465

-4.03%

-21.01%

CAC40

4,278

-5.98%

-28.44%

SMI Index

9,483

-1.89%

-10.68%

FTSE MIB

16,852

-3.37%

-28.31%

Shanghai Comp

2,868

-0.93%

-5.96%

BSE Sensex

31,098

-1.72%

-24.62%

Nikkei

20,037

-0.70%

-15.30%

Major currencies

 

 

 

USDZAR

18.56

1.13%

32.57%

EURUSD

1.08

-0.26%

-3.57%

GBPUSD

1.21

-2.66%

-8.91%

USDCHF

0.97

0.18%

0.46%

EURCHF

1.05

-0.10%

-3.12%

GBPZAR

22.41

-1.57%

20.66%

EURGBP

0.90

2.46%

5.93%

USDAUD

1.56

1.73%

9.39%

Dollar Index

100

0.63%

4.52%

 Commodities 

 

 

 

Brent

32.84

6.04%

-50.24%

WTI Oil

29.52

19.32%

-51.65%

Copper

2.33

-3.52%

-17.14%

Platinum

821.45

3.17%

-15.48%

Sugar

10.39

0.97%

-22.58%

Corn

319.38

-0.47%

-17.63%

Gold

1,753.15

2.29%

14.20%

 Sovereign Yields

 

 

 

US10Y

0.64

-7.02%

-66.44%

UK10Y - price

137.76

0.05%

4.86%

Germany10Y

-0.54

-0.37%

186.63%

 Deposit rates with selected banks

 

The MCB Ltd, 6M USD 1.20%

 

 

 

 

Contact us: Durban +27 (0) 31 566 3365 | CPT +27 ( 0 ) 21 851 0920 | JHB +27 ( 0 ) 11 017 7230 | Email: enquiries@pwm-wealth.com

Disclaimer: The research report has been prepared for information purposes and does not constitute an offer. While reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and the company accepts no liability whatsoever for any direct or consequential loss, including without limitation any loss of profits, arising from reliance on this report
 

 



Twitter
Facebook
Connect with us